Consumers are confused by the multitude of options available when signing up for direct life insurance products, ClearView Direct Life Head of Distribution David Charlton warns.

“Direct life was supposed to be easy, but having now given the consumer so much choice, they are procrastinating,” he told the recent Financial Services Council life insurance conference in Sydney.

“We developed products with lots of choice, payment options and different benefits, but we have made it too complicated.”

Mr Charlton says consumers will not pay more for increased choice, so the industry has low price points.

“[Customers] now compare with the other direct products and also retail, meaning they don’t understand what is being offered. We also keep talking about underinsurance, so consumers are now thinking those who don’t have insurance must be doing something right.”

TAL Direct CEO John Hoyle says the key to direct is “getting the right product to the right customer at the right time”.

“In the past the aim was to get as many customers as possible on the one product,” he told the conference.

Direct insurers have moved from a model based on products they want to sell to a focus on products customers want to buy, he says.

“It is the data that makes the difference to the marketing effort. We don’t want to sell products the customer won’t buy.”

He says direct life insurers must build a brand to attract consumers. “It is not about building market share – it is that customer equity in the brand.”

ANZ Wealth Head of Life Insurance Gerard Kerr says banks have vast customer bases but are struggling to make sales.

“There is the emerging opportunity of people having multiple contacts with a bank, but despite that the take-up of life insurance has been low,” he told the conference.

Selling life cover through banks should be straightforward, but customers do not enter branches looking to buy products.

“Life insurance is an area they don’t want to go to when in the bank. We have now embarked on changing the culture within the bank, so the conversation with customers will be about other products.

“But if people don’t understand life insurance, they won’t buy it.”

Mr Kerr says there are opportunities for both direct and advice-driven sales of life cover.